An employee trust is one where payments are made by an employer to the trustees who then, typically, have discretion in the accumulation and distribution of the payments. In practice, there is usually no substantial accumulation and payments are distributed immediately they are received from the company. This is often achieved by the trustees nominating the company to act as its agent in the making of payments. Because such trusts are usually discretionary in nature, tax is payable at the trust rate (see ¶352-800) on any income that is accumulated.

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